Confidence Cement to issue preference shares worth Tk150cr

Confidence Cement, a concern of Confidence Group, has decided to issue convertible preference shares of Tk150 crore to meet ongoing financial requirements and equity injection to its associate companies. 

In its recent board meeting held last week, the company decided to raise Tk150 crore by issuing preference shares.

As per the move, the issuance of convertible preference shares up to Tk150 crore and it may be modified further pursuant to the instructions of the stock market regulator or the requirement of law.

The issuance of preference shares is subject to the approval of the shareholders in an extraordinary general meeting (EGM) and the Bangladesh Securities and Exchange Commission (BSEC). 

On 25 March, the company will arrange EGM through the digital platform to secure general shareholders' approval and to identify the shareholders of the company. Whereas, the record date has been fixed on 13 March. 

Besides, Confidence Cement's board has proposed to increase authorised capital from exiting Tk100 crore to Tk350 crore along with the inclusion of preference shares as the capital to be divided into 20 crore ordinary shares of Tk10 each amounting to Tk200 crore and Tk150 crore preference shares of Tk10 each.

As per to a disclosure published on the Dhaka Stock Exchange (DSE) website, in the first half of 2022 (July-December), the company's consolidated EPS fell 23% to Tk4.43, which was Tk5.74 in July-December 2021. 

Established in 1991, Confidence Cement Limited went into commercial operation in 1994. It was listed on both stock exchanges in 1995. At present, the company has an annual production capacity of 12 lakh tonnes.

In fiscal 2021-22, the company witnessed a drastic fall in profit owing to a drop in sales, devaluation of the taka against the dollar, a rise in raw material prices, as well as losses incurred by its associate companies namely Confidence Batteries Limited.

In FY22, its EPS declined to Tk1.43 from Tk15.85 in the previous fiscal year. As profit declined, the company recommended a 5% cash, and 5% stock dividend for its shareholders.

Earlier in FY21, it had paid a 25% cash dividend to its shareholders. On Sunday (19 February), Confidence Cement's share price stood at Tk89 each on the DSE trading floor at 10:39am.